4. RESEARCH STRATEGY
4.8 Case description – understanding the Nutrition Code
The Nutrition Code29 is an Internet-based service application launched in cooperation by the Tuulia International Ltd. and the Kesko Food, a subsidiary of Kesko Corporation, a major Finnish retailer focusing on trading sector services.
With annual sales of 8.8 billion Euros (2010), Kesko Corporation is one of Europe’s largest retailers. The majority of the net sales comes from Kesko Food, consisting of more than 1 000 K-food stores around Finland. Kesko Food meets customer needs through four store concepts: K-citymarket, K-supermarket, K-market, and K-extra.
These concepts vary mainly in terms of product variety, location and service. Kesko Food’s net sales were 3.9 billion Euros in 2010 accounting for about 44 percent of the overall sales of the corporation (Kesko Corporation’s web pages).
The Nutrition Code is targeted at the loyalty cardholders of Kesko Food, i.e. K-Plussa cardholders. It uses customers’ pos-data from K-food stores combined with the nutritive substances of the groceries in order to provide customers with nutritional information about the groceries they have bought. After registering to the service, customers are able to access this information via the Internet-based application, i.e. the Nutrition Code, where customers are able to monitor the healthfulness of their groceries and receive advice on how to enhance the quality of their diet.
In the service application, customers are able to explore their own nutritional profiles in great detail. For example, customers can see how their nutritional profiles become consisted of the actual grocery items they have purchased. With the help of the service they are able to track down which nutritive substances come from which grocery items. The service provides a monthly summary of the grocery items and maintains a rolling three month’s summary of the nutritive substance resulting from
29 Throughout the research the service is referred to as Nutrition Code. In Finnish, the service is called Ravintokoodi.
the bought groceries. In addition, a monthly summary of the food groups, such as potatoes, fruits, and fish, is provided. Yet another important aspect of the service is that it provides recommendations for the customers. The customer-specific nutritional profile results from comparing the nutritional information with the recommendations provided by the National Nutrition Council30. Nutritional values of the grocery items are based on the food content database called Fineli. The database is maintained by the National Institute for Health and Welfare. These recommendations create the basis on which customers’ groceries are compared with.
Values for each nutritive substance are calculated as relative shares of the overall groceries. In other words, the size of the household does not affect the estimate of the quality of the customer’s nutritional profile as energy-standardized values are used as a basis for the recommendations. The so called food circle is used as a basis for the recommendations in terms of different food groups.
Figure 7. An illustration of the Nutrition Code's user interface
30 The National Nutrition Council is a group of experts working under the Ministry of Agriculture and Forestries. This group, consisting of nutrition authorities, health promotion representatives and representatives from agriculture, food industry, and retailing is set up for a three year period (the Ministry of Agriculture and Forestries’ web pages).
The nutritional components that meet the recommendations are illustrated with green dots and the aspects of the customer’s diet that need the most attention are illustrated with red dots. Furthermore, based on the customer’s nutritional profile, the service recommends certain products in order to enhance the quality of the customer’s diet. In summary, via the service application customers are able to browse through a rather wide selection of different alternatives concerning their nutritional profile.
4.8.1 The development process of the Nutrition Code
The service is originally developed by a Finnish firm called Tuulia International Ltd. The firm is also responsible for maintaining the service. The firm recognized the emerging phenomenon of consumers’ concern over health-related food issues and the increasing need for information about food healthfulness. However, there were no metrics to capture the multifaceted and complex nutritional playground, as described by a representative of the firm.
And well, at the same time we’ve had this megatrend, megatrend, this healthfulness, and this sort of connects with those questions that people would like to eat healthfully. When they go to the store they pile up tens or even hundreds of products in their shopping cart. And then, well, how can they know whether they eat healthfully and buy healthful products. And this is the problem that this Nutrition Code service automatically solves as it connects to the loyalty program system and calculates the contents of your shopping cart and displays it to you online.
- Representative of Tuulia International Ltd
Thus, despite the vast amount of general and detailed information about issues related to the healthfulness of food there were no means to bring the phenomenon to a genuinely concrete or personal level. There was always the possibility to calculate the nutritional values of the groceries by hand or to keep a food-related diary, but in both cases, these kinds of ways to monitor the healthfulness of the groceries could be regarded as rather inconvenient and exhausting. Hence, the aim was to come up with an automated service that could provide customers with information about the healthfulness of their own groceries. Attention was directed at the nearest automated
function to consumers’ food consumption, i.e. the transaction taking place when the groceries are actually bought.
And then we got that mostly eating-related automatic way to assess it (the eating), we sort of came up with that. This is like automated, and mostly related to eating.
- Representative of Tuulia International Ltd
As a result of the transaction, pos-data emerged. The role of pos-data can be regarded critically important since it was an automated function and in that respect decreased customers’ sacrifices. Every time food was purchased, pos-data emerged automatically including information about what was bought for what price, when was bought, where was bought, and in the case of K-Plussa cardholders, who had bought. Pos-data was then combined with nutritional information about the specific groceries; i.e. customer data was refined by adding an external informational element.
The development process of the Nutrition Code necessitated a diverse set of resources and competences. In the case of a service that is related to the healthfulness of food, the role of nutrition experts and health authorities was critically important. Their knowledge and resources guaranteed valid and up-to-date measurement of the healthfulness of groceries. In addition, the role of information systems, i.e. how to handle the information in practice, became important.
Furthermore, legal expertise was needed to make sure that the customer’s data privacy was protected according to the Finnish legislation.
The service was publicly launched in February 2009. Before the official launch the service was pilot tested for several months by the employees of Kesko Corporation.
4.8.2 The data protection law
An important aspect of the development process of the Nutrition Code was the fact that the databases including information about customer loyalty schemes and information about the healthfulness of customers’ groceries had to be kept strictly apart. Finnish legislation prohibits the firm from using the new information that emerged as a result of the Nutrition Code in its CRM activities. The employees that
had access to customer loyalty data were not able to see customers’ nutritional profiles and vice versa. The firm was neither allowed nor able to segment or profile customers on the basis of the healthfulness of their groceries. In practice, this made the development process more time consuming as well as difficult as the informational infrastructure needed to be built in a way that took this fact into account.
From the customers’ perspective, however, this was not clearly understood when the service was first launched. There were customers who thought that the firm is now supervising how healthfully each and every one is eating. Some even thought that this new information was used as a ploy to make them buy certain goods. This, naturally, was not the case as the firm was neither allowed nor able to use any of the new information for internal purposes.
4.8.3 Case selection criteria
Selecting the case is often a result of pragmatic considerations including access to data and feasibility (Eriksson & Kovalainen, 2008, 124). In multiple case studies cases are selected, for example, on the basis of the cases’ ability to represent the most ‘critical’ or relevant cases for transferring findings to other case contects or selecting cases that reflect maximum variation (Patton, 1990, 169). Yin (1994), in turn, suggests that the case should be critical, extreme or unusual. Altogether, when selecting an appropriate case study, relevance rather than representativeness should be the guiding criterion (Stake, 1994).
In this research, the case was selected for various reasons. However, two main criteria guided the selection process: relevance and access. Most importantly, the Nutrition Code offered a relevant and empirically interesting representation of the emerging research phenomenon. The focus was on intensively investigating the single case study, not to strive for maximum representativeness through multiple cases. Moreover, through a research project funded by Finnish Funding Agency for Technology and Innovation a good access to data on the Nutrition Code could be achieved. Table 15 summarizes the criteria used for selecting the Nutrition Code as the case study for the research.
Table 15. Criteria for selecting the Nutrition Code as the case study of the research
Criteria Description
Relevance
As an Internet-based service application the Nutrition Code reflected well the phenomenon of reverse use of customer data. It offered a real-world example of the research phenomenon and provided an excellent fit between the purpose of the research and the empirical case representing that phenomenon.
Access
The researcher was involved in the AAPO research project funded by Finnish Funding Agency for Technology and Innovation where K-Plus (Kesko Corporation’s subsidiary that is responsible for the customer loyalty programme) also took part among other firms. This provided initially a good access to data and an opportunity to start investigating the Nutrition Code in more detail.
Exclusiviness
There were not so many clear-cut real-world examples available of the emerging research phenomenon of reverse use of customer data.
Consequently, the Nutrition Code was a natural consequence when considering appropriate cases for the research. Moreover, it was an innovative service, not only in Finnish scale, but also internationally31. This provided additional research interest toward the service. Combining pos-data with the nutritional substances was genuinely something new that was considered worth investigating.
Wide influence
Choosing a case that utilized pos-data meant that the research included such an example that was somehow relevant for a broad scope of customers.
Customers generally know that retailers use their customer data for different CRM-related activities. In that respect, selecting a case study where the same pos-data is used in a new way for the benefit of the customers is able to illustrate well the research phenomenon of reverse use of customer data.
Topicality of food
healthfulness
Food healthfulness is an increasingly important phenomenon both within the food retailing and society in general. Therefore, it was also considered as criteria for selecting the Nutrition Code as the case study for the research. The topicality of food healthfulness justified the case in its own right.
Altogether, selecting the Nutrition Code as the case study for the research was due to the combination of the above criteria. What was essential was the case’s ability to illuminate the research phenomenon. In that respect, the Nutrition Code offered a good possibility for investigating a new phenomenon and further, developing central marketing-related concepts and constructs further.
31 Safeway, a major US food retailer has launched a similar kind of a service called MySimpleNutrition (formerly known as FoodFlex). It is based on the same idea than the Nutrition Code and provides customers with nutritional snapshots of their groceries.